Italy’s pasta labeling plan raises Canadian concerns

Winnipeg/Rome | Reuters — Canada has raised concerns with Rome about Italy’s plan to require country-of-origin labels on pasta sold there, Canada’s agriculture minister said on Wednesday about a move that is alarming Canadian wheat exporters just as a free trade deal gained European approval.

Rome sent a draft decree to the European Commission in December, seeking approval for labels on pasta sold in Italy that would identify where the durum wheat was grown and milled into semolina for pasta-making.

Canadian exporters and farmers fear the move would depress prices in Canada, the biggest durum exporter, as it would require Italian pasta makers to segregate supplies by country.

The European Union and Canada secured clearance earlier on Wednesday for their contentious free trade deal.

“We’re working back and forth with our officials. Anything that would hurt the farmers, we don’t want,” Agriculture Minister Lawrence MacAulay told Reuters in Winnipeg, in what were the Canadian government’s first comments on Italy’s plan.

He said the impact on Canada would depend on how broadly Italy applies the plan, but the minister’s spokesman confirmed later that Canada has “initial concerns.”

European lawmakers have shown an increasing appetite for labeling due to consumer demands for information about food, and Italy has also said labeling would help its pasta industry better compete with foreign competition. Such labeling might, however, be considered disruptive to the single market, which EU authorities are charged with safeguarding.

The “protectionist measure” would create extra cost for Italian pasta makers using Canadian supplies, resulting in lower prices for Canadian farmers, said Cam Dahl, president of Cereals Canada, an industry group whose members include farmers and crop exporters Richardson International and Cargill.

Canadian durum farmers last year grew their biggest-ever crop. Italy is Canada’s biggest foreign durum buyer so far in 2016-17, as of December.

“More bad news stories just put more pressure on the entire agriculture industry in Canada,” said Morgan Nunweiler, whose durum crop near Rosetown, Sask., was devalued by disease last year.

It is too early for the European Commission to comment, since it has up to three months to express observations after receiving the decree in December, a Commission spokesman said.

The labeling plan has generated mixed reaction in Italy.

Italian farmers group Coldiretti supports the plan. But pasta makers, while in favour of transparency, are concerned the labels would confuse origin with quality, said Luigi Cristiano Laurenza, secretary general of the Association of Pasta Manufacturers of the European Union (UNAFPA).

The decree also contains provisions that are only valid for Italy and could distort competition within the EU, he said.

Canada and Mexico won a similar labeling fight in 2015 when the U.S. repealed country-of-origin labels on meat, after a World Trade Organization (WTO) panel ruled against the program.

MacAulay said he did not know if Ottawa was considering a similar complaint to the WTO, but said Canada’s aim is to “keep trade flowing as freely as we can.”

— Reporting for Reuters by Rod Nickel in Winnipeg and Isla Binnie in Rome; additional reporting for Reuters by Philip Blenkinsop in Strasbourg.

In this case, there should be no panic affecting durum prices – for 10 reasons:
1. overall durum demand is increasing from Italian consumers, 2. alternative sources exist but remain unpopular due to the slowness for change by industries and prejudice toward sources other than North America and Russia, 3. these nationalistic political policies based on a ‘Buy Made in Italy’ products is to serve politicians who can say, ‘see I am protecting Italians and Italian jobs,’ but who never-ever-ever allocate any budget for the number and quality of (competent but already grossly overworked) inspectors needed to enforce such policies, 4. Italian domestic production of durum is unable to expand due to limited proper land availability, 6. Canadian durum is well recognized, 7. exchange rates are favouring Canada over time, 7. large pasta producers headquartered in Italy – one in paritcular – are expanding their mills and production facilities in North America and are not bound to such regulations for their North American packaging and have such large market shares and brand loyalty and recognition in Italy and globally, that by labelling their sources wouldn’t affect sales at all – even if they sourced it from a cess pool, 8. Italians, like many people, buy based on habit – pocketbook – final quality; but lastly by origin (other than certain classical domestic products), 9, immigrants and refugees are increasing rapidly and are increasing grain and flour product sales – even through the import and sales of food products that don’t meet packaging and labelling regulations already in place due to the lack of enforcement and profits; and either way, they couldn’t care less about the source, and finally, 10. penalties for infractions are usually moot compared to increased sales generated by even the reporting of this matter. So, seeing ‘Canada’ on labels would be a plus due to its recognition for quality by consumers. Maybe Canada should help support this proposal! Italy’s packging and labelling regulations often have enough wiggle room, that classic scams like having certain ingredients packaged/handled/slightly modified within Italy’s borders, will modify how ‘source’ is treated anyhow. Seeing alternative durum supplier countries – namely, North African countries, Turkey and former Soviet bloc states on labels, would probably make people switch to ones with ‘Canada’ on the labels as well. To me, any “initial concerns” from Canada seem ill-informed or premature at best. Canadians should be supporting this brilliant Italian iniative.